Yurt in the Altai Mountains near the border between Mongolia and Siberia

Mongolia A country with huge potential and challenging conditions

With only two inhabitants per square kilometre, Mongolia is the most sparsely populated nation in the world. More than four times the size of Germany, this Central Asian country has a population of only around 3.3 million. Its natural habitat of steppe, desert and high mountains is very sensitive to climatic change. Mongolia only has two neighbours: Russia to the north and China to the south.

Sushbaatar Square in Ulan Bator, Mongolia — Straight to

The country has successfully completed the transition from a communist people’s republic to a parliamentary democracy and a market economy. The mainstays of Mongolia’s economy are animal husbandry and the extraction of raw materials. Partly due to a drop in commodity prices Mongolia’s economic growth slowed for a certain time. The closing of borders to China because of the COVID-19 pandemic, trade restrictions and soaring fuel and food prices caused by Russia’s war of aggression against Ukraine made the economic and social situation worse. But things have begun to pick up again.

Development is also hampered by weak infrastructure, a shortage of skilled workers and widespread corruption. Rural areas in particular have not shared in the country's economic progress. The nomadic population and livestock farmers in particular, are threatened with the loss of their livelihoods as a result of increasing environmental degradation.

Mongolia is currently ranked 96th out of the 191 countries assessed in the United Nations Human Development Index (HDI).

German development cooperation with Mongolia

Development cooperation between Germany and Mongolia began in 1991/92, after the country underwent a political and economic transition. In spring 2020, the decision was taken to end bilateral cooperation in the medium term. At that time, Germany was the third biggest bilateral donor, after Japan and South Korea, and the most important European partner for Mongolia. In autumn 2022, bilateral development cooperation was resumed because of the changed global political situation and Mongolia’s increased challenges. It is focused on the following core areas:

Conserving nature and natural resources, protecting life on Earth
Area of intervention: Biodiversity
Sustainable economic development, training and employment
Area of intervention: Technical and vocational education and training (TVET)
Climate and energy, just transition
Area of intervention: Energy efficiency

The Federal Ministry for Economic Cooperation and Development (BMZ) made a commitment of 24 million euros to Mongolia for cooperation in 2022.

Mongolia has a rich diversity of ecosystems and biological species. However, the valuable natural resources are under threat through excessive use and climate change. In order to preserve Mongolia's unique natural heritage and at the same time improve the living conditions for the people, more must be done to promote and manage nature reserves. Germany is currently providing support for eleven nature reserves throughout the country.

Training workshop for future welders at the Hasu Megawatt training centre, Ulan Bator, Mongolia

Mongolia’s resources include coal, copper, gold, many different minerals and ores, and also rare earth metals. Mongolia is the first country with which Germany has concluded a raw materials partnership. Germany is also supporting Mongolia in its efforts to improve the business environment for small and medium-sized enterprises (SMEs).

Solar plant and coal-fired power station in Ulan Bator, Mongolia

Mongolia has an extreme climate. There are great variations in temperature, ranging from over 40 degrees Celsius in summer to minus 50 degrees Celsius in winter. Reliable power supply and heating are vital for the people in Mongolia. Germany is supporting the modernisation of power plants, substations and public distribution grids. This will increase energy efficiency while at the same time cutting greenhouse gas emissions.